Co-founder and Partner of Zelkova Ventures

Credit Cards Go Smart

Digital payment systems like Apple Pay and Venmo are catching fire as more and more people move their money entirely online. It seems like we’ve entered the perfect environment for the adoption of “smart” credit cards, or cards that combine several accounts into a single card. Instead, smarts cards have had a rough landing in the marketplace over the past several years. However, new cards continue to emerge and, taking into account some of the enhancements these cards are promising, perhaps the smart card is finally coming of age.

Most recently, Plastc ceased operations, and several other early smart card entrants (Coin, Stratos, Swyp) met similar fates. How could this possibly be when other digital payment systems are clearly catching on? Several factors worked against them. One problem was the technology, which originally employed a dynamic magnetic stripe meant for swiping. The problem was, by the time (some) of the cards were actually distributed, merchants had committed to abandon magnetic stripes in favor of EMV chip-enabled cards. These early cards weren’t chip enabled, so their creators had to go back to the drawing board. Plus, these were cards that consumers had to pay for, ones that were a touch unreliable, and needed to be loaded and maintained. The alternative was to skip the hassle and go with regular cards, which are free, easy-to-use and trustworthy.

Some of the early smart cardmakers attempted to create new cards that supported EMV chips and tap-and-pay NFC transactions, but none of them quite got there.

Now, however, Sprint has unveiled its smart Wallet Card. It’s the world’s first battery-powered, “connected” payment card. You can load your bank’s credit, debit, prepaid, multicurrency, one-time-use and loyalty cards onto it, and save yourself an inch of wallet space. The battery is self-charging, and it’s got the strip, the chip, and even a “contactless” chip. It has the potential to better address fraud, and banks will no longer need to send out replacement cards in the mail: they can simply zap a new one to Wallet Card. The card would also be issued by your existing bank. So far, Sprint has signed several overseas contracts, but has yet to woo the United States. But given that it has addressed so many of its predecessors shortcomings, it feels imminent.

The Consumer Technology Association (CTA) recognized Sprint with four CES Innovation awards including the Best of Innovation Award for Security Technologies. It was an honoree for Computers, Embedded Technologies, and Technologies for a Better World. The company is providing IoT technology, support and expertise to the initiative, in addition to being the first telecommunications entity to power a card like this. According to Jan Geldmacher, President of Sprint Business, it’s a “groundbreaking example of how important converged networks and advanced integrated technology will be for the lives of everyday people across the globe.”

As cool as this is, the smart card will still need to contend with more established digital platforms like Apple Pay, Google Wallet and Venmo. There’s also a great convenience to wearable payments technology. Apple is already established with the Apple Watch, and in 2016, Fitbit bought Coin’s technology in an effort to create the same. Time will tell which technology consumers gravitate towards most, but – whatever it is – it will prove a big change from the payment methods of yore. Looks like you definitely won’t be needing that checkbook anymore.

About the authorLarry Scheinfeld

Larry Scheinfeld is an esteemed investor and venture capitalist with a knack for helping startups thrive. He is a co-founder and Partner at Zelkova Ventures, a venture capital firm based in New York City.